Five tips for anyone wanting to become a real estate investor

Flipping houses in the Temecula/Murrieta Valley and across the Inland Empire has been a lucrative venture for investors for many years. Many think it is a quick way to a fast buck. Many have tried and many have failed. Flipping houses is serious business and should not be taken lightly by the novice real estate investor. Before you begin down this path, prepare yourself. Here are five quick tips to help you understand what you’re in for, before you actually start investing your money.

1. You need to know that it’s work.

You need to work with a good local REALTOR® who understands the local market. A local REALTOR® can not only help locate profitable homes through the Multiple Listing Service (MLS) but will be able to lead you to other lesser known resources as well. When it’s time to sell the home your REALTOR® will know the market and help you achieve the greatest price for your fix and flip home for sale.

2. If you are buying low, you’ll need to spend more.

The whole concept of discounted homes for sale is that they need repairs and upgrades. There is no reason for someone to sell a turnkey, state-of-the-art home for a discounted price. It takes time and money to get a home ready to flip and generate the largest possible profit.

Contractors are an important part of your team, so start lining them up now. Yes, you should be able to do some work yourself, but understand that time is money – how much time do you have to invest in the project? The quicker it sells, the quicker you get paid and the money you have tied up is free again.

3. The kitchen makes the sale.

The one room that swings more sales is the kitchen. Here in the Temecula/Murrieta Valley, kitchens should have recessed lighting, solid surface countertops and high-end matching appliances if you want to capture the ‘wow’ factor. Upgraded cabinets, a full backsplash, under-the-counter lights and tile/hardwood floors all do their part in closing a deal.

4. Garage doors are part of curb appeal.

There’s nothing worse than selling an upgraded home, beautifully landscaped with a nasty old wooden garage door (just as bad is a dented, metal roll-up). People do judge books by their covers and houses by their curb appeal. The garage door is the first thing anyone sees, so make sure it’s memorable. First impressions count.

5. In landscaping, less is more.

When a potential buyer is considering purchasing a new Temecula/Murrieta home, they want it to look nice. What they don’t want is a lot of high-maintenance landscape, no matter how stunning. Remember your audience, most home buyers in our Valley are working families who don’t have all week to tend to the grounds nor do they want to spend all weekend doing it either. Keep your landscape clean and simple and don’t forget the back and side yards, too.

If you are considering getting into the real estate investment business, either as a part-time venture or your life’s work, know what you are getting yourself into. Follow these simple suggestions and you’ll be making your first trip to the bank from escrow in no time.

Call us today and get the information you need to make the right decision. The info is free, call now! (951) 296-8887.

Is long as your intention is to use the property as your primary residence (not an investment property or even a second home, which will be scrutinized by a mortgage underwriter if you’r not paying in cash), consider using the FHA 203(k) renovation loan. The "streamlined" version allows borrowing of up to $35K for non-structural changes (so you can put a new roof on, new floors, renovate kitchens & bathrooms… you just can’t make "additions" to the home or fix foundation issues). The streamlined version lets you borrow up to $35K for renovations and the contractor(s) have up to six months to finish their job(s). The contractor(s) get paid 50% just after the loan closes and then the other half when they finish their job (as evidenced by a final inspection of the work performed by an appraiser). Real estate agents love this program as they often come across the home that is "almost" perfect, yet something is just not right (the kitchen is outdated, floors need replaced, roof needs replaced, siding needs replaced, etc.). This allows that "almost perfect" home to now become "perfect" if they use this loan. The trick is to find a lender that not only offers this loan (many do) but that actually CLOSE the loan within a reasonable amount of time (a good lender can get this done in 45 days). As a mortgage loan originator, when I come across a request for a type of loan that we can’t offer then I direct the to http://www.RateBid.com. This website lets buyers post a loan scenario to that only takes about 30 seconds to complete, no sensitive information is required, and borrowers stay anonymous while the data is distributed to mortgage lenders (even "portfolio" and "hard money" lenders) across the country. Borrowers can log in and watch these lenders compete with each other, often resulting in entertaining "bidding wars" between lenders as they waive fees and reduce rates with supervisor approval after reviewing competitive "RateBids" for a particular scenario. The end result is that borrowers are able to "zero in" on lenders that believe they can approve the scenario (in this case, the buyer would want to mention that they are seeking an FHA 203(k) renovation mortgage) and who can offer the best rates. Borrowers are allowed to contact as many of the bidding lenders as they want after reviewing their profiles, which contain all company and contact information, experience level, website, biography, feedback rating(s). Using RateBid.com lets borrowers compare rate, APR, mortgage payment, mortgage insurance payment, and closing costs.